"HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market," said Rick Osterloh, Senior Vice President of Hardware at Google, in a statement.

"We're excited and can't wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware."

The transaction was expected to close by early 2018.

This is the second time Google has acquired a smartphone manufacturer. It announced a $12.5 billion buyout of Motorola Mobility six years back and in 2014, sold it again to Lenovo.

HTC will continue to build the virtual reality ecosystem to grow its VIVE business, while investing in other next-generation technologies, including the Internet of Things (IoT), augmented reality and artificial intelligence (AI).

HTC will also continue to have best-in-class engineering talent, which is currently working on the next flagship phone, following the successful launch of the HTC U11 earlier this year.

Google will have access to HTC's IP to support the Pixel smartphone family.

Additionally, the agreement also represents a significant investment by Google in Taiwan as a key innovation and technology hub.

"Our unmatched smartphone value chain, including our IP portfolio, and world-class talent and system integration capabilities, have supported Google in bolstering the Android market," said Cher Wang, Chairwoman and CEO of HTC.

"This agreement is a brilliant next step in our longstanding partnership, enabling Google to supercharge their hardware business while ensuring continued innovation within our HTC smartphone and VIVE virtual reality businesses."